Business owners Attempt to cope as minimum wage creeps higher

The Chicago Tribune reports:

The Federal Reserve Bank of San Francisco put out a paper in a December that said the overall body of recent evidence suggests a higher minimum wage results in some job loss for the least-skilled workers. Author David Neumark estimated current minimum wages have directly reduced the number of jobs nationally by about 100,000 to 200,000 compared to the period just before the Great Recession, a small drop that should be weighed against the benefits of increased earnings for workers who kept their jobs.

Reams of research have studied the potential impact of raising the $7.25 federal minimum wage, with no clear consensus. When the University of Chicago Booth School of Business asked a panel of more than three dozen economic experts last year whether the employment rate for low-wage workers would decline substantially if the federal minimum wage increased to $15 an hour by 2020, nearly 40 percent said they were uncertain. The rest of the responses were split relatively evenly, with slightly more people saying they agreed employment would be lower.

There was more consensus on whether a hike to $15 would substantially increase output in the U.S. economy, with more than half saying it wouldn't. Just 2 percent said it would.

The Federal Reserve Bank of Chicago did an analysis in 2013 that found a $1.75 increase in the federal minimum, to $9 an hour, would boost prices and spending among low-wage workers and could increase the level of gross domestic product by 0.3 percent in the short term, but would have virtually no effect in the long term.

The demand for labor is always a downward sloping curve. Always.